Freaky Friday Potpourri
A red mess welcomes the weekend.
Recent Recap
We fired up Freaky Friday to find a fresh game of chicken, with š¤š¤ (algos) on one side and expiration influences on the other as the specter of federal guidance floats in the air. We also have an ALJ hearing next month, for those focused on such things.
Itās worth noting that AU SIII isnāt a done deal, as much as we would like to believe it is because thatās what POTUS wants, but SAM and their stinky clam band have lawyered up and are waiting to pounceāand we know DJT isnāt a huge fan of Bill (Fu)Barr.
Earnings season has largely come and gone and if you would like to dig into the nuts and guts, we recapped most of those reports.
Net/net: decent to solid given the status quo but earnings are rearview and markets look forward, which is precisely where sector CEOs have their collective eyes fixated.
We expect consolidation and know deals happen for one of two reasons: they need to, or they want to. There are tons of synergies and cost-savings to unlock on top of the triple-secret positives of a potential 280E MMJ back-tax vacation, the possibility for US cannabis exports and of course, uplisting.
To that end, I was on a call with a senior member of one of the major U.S. exchanges a few days ago and he said,
āAs long as youāre operating in a state-legal medical jurisdiction, this is a new and different conversationā¦there is now a pathway to be listed.ā
That comment is supported by the fact that U.S. operators are actively fielding calls from both exchanges as they ready to exhale, as evidenced by Trulieveās decision to redomicile, following Veranoās lead. Curaleaf and TerrAscend are listed on the TSX and could ADR quickly, if/ then, while GTI has the RYM vehicle.
I know, pull this leg and it plays Jingle Bellsā¦ but as always, weāll see.
Chart Check: MSOS
We got a heavy duty back-test into a cluster of support levels as the sector digested May expiration. The ETF lost 13% for the week (9% today) and given we know that churning under resistance is bearish and basing above support is bullish, technical types will be monitoring the next leg closely.
Top Stories
Pot Inc. may finally be inching closer to the US bank access it craves
U.S. Legal Canna Sales Reach $2.34B In April, Bringing 2026 Total To $9B
DEA To Launch Medical Marijuana Registration Forms For Manufacturers, Labs And Distributors
U.S. House Rules Committee Approves Allowing VA Doctors To Recommend Medical Marijuana To Veterans
Does Federal Marijuana Rescheduling Change Cannabis Advertising Rules?
Minnesota Senate Approves Omnibus Marijuana Bill
Indiana State Senator To Write Legislation In 2027 That Would Legalize MMJ
Florida MMJ Sales Climb Over 7.8B MG Of THC In ā26; Dispensary Count Hits 762
Georgia Governor Signs Bill to Significantly Expand Medical Cannabis Program
Industry News
Organigram Reports Second Quarter Fiscal 2026 Results
Vireo Growth Inc. Announces First Quarter 2026 Results
Ascend Wellness Earnings + Call Notes
Glass House Earnings + Call Notes
TDR: Village Farms CEO Michael DeGiglio
The Devlin made him do it.
ATB on Village Farms
Village Farms reported solid Q1/26 results, with beats on revenue and adj. EBITDA.
We believe the fundamental outlook for Village Farms remains strong as global demand continues to grow at attractive rates, and the Company maintains a differentiated competitive position as a high-quality, low-cost, large-scale supplier to international markets.
The Companyās balance sheet remains robust with $55.5m of cash and only $35.7m of debt exiting the quarter, which provides flexibility and optionality to invest in M&A, organic growth initiatives, and additional share buybacks.
We believe that rescheduling reform in the US could add material upside to the story, considering Villageās presence in Texas and world-class cultivation expertise.
ATB on Ascend Wellness
Ascend reported positive Q1/26 results, highlighted by an adj. gross margin of 46.1% driving robust adj. EBITDA of $26.3mm (compared to consensus of $23.9mm).
We remain constructive on Managementās initiatives to improve Ascendās branded portfolio, which is yielding tangible results through margin resilience despite persistent industry-wide price compression.
Over the remainder of the year, we expect Ascend to return to sequential top-line growth supported by new store openings, with its retail densification strategy and increased verticality partially offsetting broader competitive pressures.
Ascend maintains a strong balance sheet, which we believe provides the company with flexibility to continue executing its strategy while regulatory reform materializes.
ATB on Glass House
Glass House delivered neutral Q126 results that aligned with preliminary reporting and reaffirmed its full-year 2026 guidance. Challenges in ramping a new workforce while substantially increasing production have pressured near-term results, but the long-term outlook remains unchanged.
We remain constructive on the company as a "controllable growth" story, supported by greenhouse conversion optionality and the significant operating leverage embedded in its cultivation ramp.
Critically, the recent rescheduling of state-licensed medical cannabis serves as a potential paradigm shift, as it could lead to international exports and interstate commerce.
Glass House is uniquely positioned to capture substantial value in these scenarios through its low-cost, large-scale cultivation capabilities and capex-efficient production expansion.
By diversifying beyond Californiaās low-price environment, Glass House would stand to dramatically broaden its total addressable market and increase average selling prices, driving substantial margin expansion and cash flow generation.
Consequently, we view the successful expansion into non-Cali channels (beginning with smokable CBD flower this year, which we believe would be a smaller market serving as an initial entry point, and progressing toward domestic and global medical cannabis exports as a primary catalyst for a material stock rerating.
Stems & Seeds
Next-Gen Cannabis: The Innovative Race To Manufacture Compounds
New Calif. study finds evidence cannabis could treat obesity, diabetes
Have a safe journey, please enjoy responsibly.
If youād like to help Mission [Green] change federal cannabis policies, please click here.
CB1 has positions in/ advises some of the companies mentioned and nothing contained herein should be considered advice.